Wednesday, April 25, 2007

The Carnival of Risk # 24 is Up

The Carnival of Risk is up over at "The Digerati Life:"

"Welcome to the Carnival of Risk #24, where we showcase articles that discuss risk in all its forms, particularly touching on the subjects of risk management, insurance, investing and other articles on business and financial the rest.

Humana Caps Annual Increases on Consumer-Driven Plans--Too Bad it Isn't a Real Guarantee

Humana says it will cap annual increases on self-insured consumer-driven plans for three years.

Two problems:
  • Humana is capping the costs of its "SmartResults" self-insured plans and only putting 40% of their fees at risk. If they were really putting their money where their mouth is they would be capping the cost of fully insured plans--and if they are so confident on their self-insured product, why not put all fees at risk?
  • Humana is guaranteeing that the consumer-driven employer plans total health costs will rise by no more than 6% to 9% during the next three years (based upon how aggressive the employer plan is). Since they have consistently said employer trend is now in the 5.5% to 6.5% range, I wouldn't call that one of the bigger risks I have ever seen a health insurer take.
They point out that their consumer-driven plan costs only rose by 4.2% between 2002 and 2006. The problem I have with that is that as consumer-driven plans grow they tend to get the healthiest people first. A consumer-driven plan should have lower trend at first. The question is whether that is sustainable or not?

Apparently, Humana agrees with my concern that their 4.2% trend rate won't be sustained. If they believed in their 4.2% trend rate, they'd be guaranteeing a lot better than a 6% to 9% cap.

Humana Caps Annual Rate Increases on Some Plans (bizjournals)

Post: More Than 10 Million Now Using Consumer-Driven Health Care Accounts--We Will Soon Have Enough Data to Know How Well HSAs and HRAs Work

Tuesday, April 24, 2007

The Medicare Fee-For-Service Product is a Kamikaze Flight for Health Insurers--But Are the LBO Guys Interested in Humana Anyway?

There is plenty of speculation over just what the Congress will do about Medicare Advantage payments to health plans.

I have posted on this many times before.

To summarize, I believe:
  • Medicare Advantage payments to health plans will not be cut by the Congress for 2008.
  • But health plans will suffer some relative Medicare Advantage payment decreases in 2008 because the average 3.5% increase the plans are scheduled to get is less than the approximately 5% senior costs are rising.
  • The Medicare Advantage plans will likely be able to compensate for these minor adjustments by making benefit reductions.
  • The first year the Congress can dramatically impact Medicare Advantage rates is 2009, since CMS will have set the 2008 rates with the health plans prior to the Congress finalizing the next budget late this year.
But make no mistake, the Congress will make measurable changes to Medicare Advantage payments for 2009.

Key House Democrats really want to hit the Medicare Advantage plans hard to pay for S-CHIP reauthorization and to reverse much of the 2008 10% Medicare physician fee cuts that are set to take place without Congressional action.

Senate Democrats are inclined to make 2009 payment adjustments but are not interested in scuttling the Medicare Advantage plans. Democratic Senators like Max Baucus and Ron Wyden stand out in that category.

When the day is done, House Democrats will want big cuts and Senate Democrats will be more moderate in their approach. The result will be compromise cuts for 2009 that will be measurable and will cut into both benefits and profits.

But I will tell you where even the moderate Democrats are not going to be defending private Medicare--the private fee-for-service plans.

Everyone, in Washington and the health insurance industry (in their off-the-record moments), see Medicare Advantage private fee-for-service plans as nothing more than an arbitrage play. Initially created as a transition plan, there isn't any evidence any of the plans are using these programs to do anything other than grow profits.

No one on the Democrat side is going to defend fee-for-service Medicare Advantage plans (and maybe not a lot of Republicans either).

Yet, health plans continue to announce plans to expand their Medicare private fee-for-service products, in may cases in markets where they don't have the "upstream" network Medicare Advantage plans.

With the Congress poised to go after private fee-for-service Medicare plans, such a strategy is nothing but a Kamikaze flight!

We are hearing that there is speculation on Wall Street that the biggest Medicare fee-for-service player, Humana, may be of interest to the leveraged buy-out guys. The reasoning goes that Humana's profits are really out on a limb because of their focus on Medicare Advantage, and especially their emphasis on their fee-for-service product, with the Democrats wanting to cut both. Therefore, getting taken out sooner rather than later makes sense for them. The speculation goes on that with such a high stock multiple, and the political risk, no competitor would be dumb enough to pay a premium on the existing stock price to take them out. That leaves the LBO players who have more cash and access to debt than they know what do do with.

An interesting, if only highly speculative, scenario.

Do you know of any LBO guys who have their pilot's license?

Friday, April 20, 2007

Medicare Drug Negotiation Bill Fails in the Senate

Democrats fell short of the required 60-votes to pass a bill that would have allowed the Secretary of HHS the power to negotiate Medicare Part D drug prices. Democrats did get 55 votes while 42 Senators opposed the bill. The vote generally followed party lines.

The Medicare Part D drug negotiation bill was little more than a political charade anyway since the bill would not give HHS any leverage in negotiating Medicare Part D drug prices. Unless Medicare has the right to exclude a drug from coverage under Medicare, there isn't any reason for a drug manufacturer to lower their price. The lack of any negotiating leverage made this a pretty hollow bill.

If the bill had passed and been combined with a similar (and just as hollow) House bill, President Bush would have vetoed it making this a just a political exercise.

Even though this was a very weak bill, the pharmaceutical industry pulled out all of the stops to kill it. Their worry was that even this weak bill could have been manipulated by regulation into something more powerful by a future Democratic Secretary of HHS. If nothing else, it also represented the "camel's nose under the tent" since it could have served as the basis of an expansion by a more liberal Congress and President down the road.

Ironically, private Medicare Part D insurance companies have this leverage--they can exclude a particular manufacturers product (although they must include drugs from every class) or place it in a co-pay tier that puts it at a disadvantage from competitors drugs. That leverage makes it possible for insurers to get lower prices.

You can also hear my Wednesday evening comments on public radio's "Marketplace:" Medicare Drug Bill Stalls

My January comments on the House drug negotiation bill: The Democrats Hollow Part D Proposal

Thursday, April 19, 2007

Latest "Health Wonk Review" is Up

Health Wonk Review is a biweekly compendium of the best of the health policy blogs. More than two dozen health policy, infrastructure, insurance, technology, and managed care bloggers participate by contributing their best recent blog postings to a roving digest, with each issue hosted at a different participant's blog. For participants, it's a way to network and share ideas, and for those readers who don't live in this space every day, it's a way to sample some of the latest thinking and the "best of the best."

The latest is up over at Jason Shafrin's Health Care Economist.

Hillary Clinton Doesn't Like Health Insurance Companies and Never Has--But Demonizing Them Again Won't Get Us Health Care Reform

At a recent health care forum attended by Democratic presidential candidates, New York Sen. Hillary Rodham Clinton observed, "The insurance companies make money by spending a lot of money employing a lot of people to try to avoid insuring you, and then if you're insured, to try to avoid paying for the health care you received... ." (Newsday 4/14/07)

I'm sorry to hear her say that.

Health care is one of those things where it might be good to remember that no one is in the position to throw the first stone. You can come up with a pretty long list of health care actions it's hard to defend the insurance industry on. The list is about as long for hospitals, drug companies, doctors, lawyers, and all the rest--and includes U.S. Senators on both sides of the isle.

In 1993, when Senator Clinton launched her failed health reform plan, she made a point of declaring the insurance industry enemy number one. Instead of trying to bring the insurers into her tent, she pointedly excluded them and tried to create political leverage by making them the bad guys in the debate.

Insurers, seeing no chance to play on the inside, concluded they might as well dig in and fight in what came to look like a fight for survival. The result was those now famous insurance industry financed "Harry and Louise" ads that are credited with making a major difference in turning the tide against Mrs. Clinton and her health plan.

Hillary Clinton could be the next president. If she is, health care will certainly be at the top of her list.

Will Hillary Clinton make the same mistake by isolating and demonizing the health insurance industry once again?

I hope not.

For health care reform to work we will need to get all the of stakeholders to the table.

The major stakeholders, like the health insurance industry, already have enough selfish reason to undermine fundamental reform without being forced into another counterproductive corner.

Come on Hillary!

Wednesday, April 18, 2007

Democratic Presidential Candidate Bill Richardson Supports the Employer Mandate as a Way to Provide Health Insurance

Democratic Presidential Candidate Bill Richardson has weighed in on the health care debate with comments about what he would do on the issue:

"You know, every time a Democrat, it seems, we propose a new [health care] plan, it's more spending or more taxes. I'm not that way...I would have a mandate. I would say every employer...has to have a health care plan. That's how you pay for it."

Well Governor, an employer mandate is a tax and it would be used for more spending. It's just a matter of who you would tax and how much you would tax them.

There are a number of ways we can accomplish universal health care coverage. An employer mandate is one of them. An employer mandate would target the employers who do not provide coverage. The problem is that the vast majority of these employers would like to provide coverage--they just can't afford it. With the average cost of family health insurance at about $11,000 a year, an employer paying the typical 75% of that cost would have an obligation of $8,000.

Governor Richardson, you are suggesting an employer head tax of $8,000.

We do need to move toward universal coverage but we need to do it in a way that spreads these high costs as widely as possible. An employer mandate could be part of that strategy, as it is in Massachusetts, but it has to happen in a way that doesn't put small businesses--where so many new jobs are being created--out of business.

We also need to recognize how much health care does cost and understand that huge burden cannot be sustained by any one of the potential payers--individuals, their employers, or government.

And, once we figure out who is going to pay for it, we need to assure ourselves that we can contain health care costs.

The only thing worse than how much health care costs today is how much it will cost tomorrow if we don't make cost containment a big part of any solution.

Tuesday, April 17, 2007

The Imus Fiasco and the Virginia Tech Massacre—What They Have in Common

Why is it that these campus massacres seem to be a unique American phenomenon?

Last week the country struggled to understand why the Imus fiasco hit such a raw nerve.

This week, a 23-year-old Northern Virginia kid took some kind of rage out on dozens of innocent people at Virginia Tech.

Could it be that the two share some kind of common thread?

I believe they do.

In my mind that thread has to do with the mean spiritedness that seems to pervade this modern American society.

What does it say about us that “shock jocks” make millions of dollars a year and have millions of listeners? Talk radio is full of people on the right and left who can’t say enough disrespectful things about those on the other side of political issues—and make their own fortune driving a daily wedge between us. If someone doesn’t agree with them they are stupid, ignorant, and even unpatriotic.

On Capitol Hill and in the White House, Democrats, or Republicans, can’t offer enough vitriol about people who think differently then they do.

America’s health care challenge is made all the harder by political and policy opponents who have little respect for each other in the everyday debate. Each side can’t seem to see any value in the other’s proposals.

Go to a ballgame or travel the expressway and the lack of civility among us is an everyday occurrence.

The vast majority of us can live through this mean-spiritedness and still not buy a gun and take it out on our neighbors. But on the far edge of society a very few apparently can’t—particularly these young people at places like Columbine and Blacksburg.

If the center of our society, our leaders in Washington, and our popular media elite, make themselves successful by developing mean-spiritedness, disrespect, and the devaluing of those they disagree with into an industry, why should we be surprised that out on the edge an unstable few take it the rest of the way?

Maybe what Imus was about is that most of us have finally had enough of this garbage. I hope so.

If so, it was too late for these kids and their teachers.

Senate Developments on Medicare Advantage Payments to Health Plans and the State Children's Health Insurance Program (S-CHIP) Reauthorization

The Senate is back to work and two important developments occurred last week in the debate over Medicare Advantage payments to health plans and the reauthorization of the State Children's Health Insurance Program (S-CHIP).

First, the Senate Finance Committee held a hearing where its chair, Senator Max Baucus (D-MT) and ranking Republican, Chuck Grassley (R-IA), both expressed concern about the potential reduction in Medicare Advantage payments to the health plans. This is not unexpected. Both Baucus and Grassley were part of the original group responsible for passing the 2003 Medicare Modernization Act that created both Part D and the private Medicare Advantage program.

More, both are Senators in rural states that have fought hard to bring their constituents the same kind of access to private plans seniors in many of the larger markets had enjoyed for years before the 2003 Medicare Act.

Grassley and Baucus weighing in on this is just a reminder that the likely outcome of this debate is not going to be either a full cut for the health plans in what the CBO and MedPAC both called "overpayments," nor will the health plans escape any adjustments.

There are enough Democrats, particularly in the House, that will insist on some cuts at least as a means of funding S-CHIP reauthorization and as a means to fix at least some of the Medicare doctor fee cuts--slated to be 10% in 2008.

The Senate parliamentarian this week also ruled that Democratic plans to spend $50 billion over five years on a big S-CHIP expansion (beyond reauthorizing the existing scope of the program) cannot be done as part of the budget process but must stand on its own.

This is important because, since it will not be a budget vote, it will be subject to standard Senate procedures that have the effect of requiring 60 votes to pass the $50 billion expansion of S-CHIP.

That Senate ruling will likely significantly undermine Democratic attempts to expand S-CHIP so dramatically. The likely outcome will be something that looks a lot more like a $15 billion (five year) extension of the current program at existing funding levels. That reality will ultimately make the budget process easier--by $35 billion. That will have the effect of reducing how much money the Congress needs to find for the new budget.

When the day is done, the Congress will have as its first health priority the extension of the existing S-CHIP program, at least significantly easing the pending 10% doctor cuts, and then it will need to cut Medicare Advantage payments to help pay for both.

Will the Congress cut Medicare Advantage plans by the full 10% to 12% they are told the program is overpaid? Not likely. But they will have to cut the programs enough to make a big difference.

The Congress needs the money. Putting a new spin on what the old bank robber said, Medicare Advantage plans are where the money is.

Other Posts on Medicare Advantage Cuts

Monday, April 16, 2007

More Than 10 Million Are Now Using Consumer-Driven Health Care Accounts--We Will Soon Have Enough Data to Know How Well HSAs and HRAs Work

Consumer Driven Market Report (CDMR) has issued a report on the success of consumer-driven care in the marketplace.

CDMR reports that over 6 million people are participating in health plans that have a health savings account (HSA) as part of their plan—that is an increase of 2.85 million in the last year.

Similar health reimbursement accounts (HRAs) now total 4.1 million and are growing at a rate of 1.2 million per year according to CDMR.

Eleven insurers now have over 100,000 covered lives in HSAs and HRAs.

The top five include:
United Health Group 2,145,000
Wellpoint 821,000
Aetna 627,000
CIGNA 500,000
Assurant 400,000

Having ten million people in consumer-driven care today reflects huge growth for a market that is just a few years old.

It also reflects a consumer-driven market that is still only 5% of the U.S. private health care system.

At 5% of the private market, consumer-driven care, with its HSAs and HRAs, does not make up enough of the market to make a real difference in reducing our nation’s huge health care bill.

My own opinion about HSAs and HRAs has always been that they are no silver bullet solution. While HSAs and HRAs do little if any harm, I question just how much good they will do in improving either health care quality or cost.

The old rule is that 15% of the people incur 75% of all health care costs. Once these people blow through their HSA or HRA deductibles, they are in a full-pay area and their incentives haven't changed one bit.

That said, HSAs and HRAs can certainly have a positive impact on smaller dollar costs below that threshold. Consumer-driven plans have done a lot to move the country to use more cost effective generic drugs, for example. And, HSAs are one heck of a good tax preference especially for people who are going to have a high deductible health plan anyway. I have also told my insurer clients that they have to offer these plans if for no other reason than to stay current with market demands.

I also know that HSA and HRA programs are often priced lower than conventional plans. But that is generally explained away by the higher out-of-pocket expenses these plans incur and the likelihood of the healthier joining (positive risk selection). There is yet no definitive evidence just what an HSA or HRA does to control cost and improve quality.

Am I right in my pessimism that HSAs and HRAs are not going to have a fundamental impact on either health care cost or quality?

Well, at 5% of the market and 10 million people, we should be at a point where we will soon have enough data to know. We won't have to argue about it much longer.

Friday, April 13, 2007

Another Victory Declared in Massachusetts--The Connector Exempts 20% of Uninsured State Residents From the Requirement to Buy a Health Plan

The only place there are more victories being declared than in Iraq these days is in Massachusetts.

The Massachusetts Health Plan regulator, "The Commonwealth Connector," has issued new rules that will exempt an estimated 20% of the uninsured from a state legal requirement to purchase health insurance.

Since the health plan bids came in last month, it has been clear the prices would not make it possible for Massachusetts to be able to implement its mandate that all citizens have health insurance or pay a penalty.

Given what they are required to work with, the "The Commonwealth Health Insurance Connector Authority" has come up with a rational way to implement the mandate--such as it is.

Fundamentally, the problem they are dealing with is one of cost. Health insurance just costs too much in Massachusetts and everywhere else in our country.

Good for the "Connector" in that they have done as much as anyone could have.

Massachusetts is also being successful in expanding the number of people who will receive a full subsidy for a health insurance plan:
  • "The income threshold for an individual who receives a full subsidy and does not have to pay monthly premiums for the Commonwealth Care health insurance program would increase from 100 percent of the federal poverty level ($10,210) to 150 percent ($15,315).
  • "For those earning between 151 and 200 percent of the federal poverty level ($20,420), the monthly premiums for Commonwealth Care would be reduced from $40 to $35."
With these changes, Massachusetts has effectively solved the uninsured problem for people below 200% of poverty--no small accomplishment.

But let's not have any false celebrations here. The Massachusetts experience tells us that closing the uninsured gap, and covering everyone, is something that has a cost no state can afford on its own. While this is a practical solution, it is not an elegant one--or a comprehensive one.

Under the program, a family of three earning $50,000 per year will have a health insurance plan available to them but it will cost about $7,000--and that plan has a $2,000 per person deductible. Before the Connector's ruling on exemptions, that was mandatory. Now, a family making $50,000 is exempted from the mandate if it can't find a plan for less than $3,840 per year. Based upon the "Connector's" health insurance rates, they won't find one.

They are exempted from the mandate. Problem solved.

Well, not exactly. That family still doesn't have insurance and it won't. If that family could find the money, it would pay $7,000 and get a plan with a $2,000 individual deductible ($4,000 family). The plan does have some limited first dollar office visits.

A $7,000 cost for a plan with a huge upfront deductible is no great deal for this family. It is no better deal to have the state now say, "Never mind."

It's worse for older citizens in this age-rated program. A 56-year-old would pay $351 to $505 in eastern Mass for the $2,000 deductible plan. The exemption doesn't help them get insurance.

It's not always rosy for people who still find themselves under the requirement to buy a health insurance plan. For example, a couple making $41,000 a year would be expected to pay $270 per month or $3,240 per year for a plan with a $2,000 deductible--if they can find one for that price. Not a lot for health insurance but a great deal to be expected of a couple making $41,000 a year.

The lesson from Massachusetts is not that they have found a practical way to do comprehensive health care reform.

The lesson is that a state cannot do it all by themselves.

In Massachusetts, the good news is that the glass is half full--a lot of people will have coverage who didn't before particularly between 100% and 200% of the federal poverty level.

The bad news is that the glass is half empty--lot's of people have been "exempted" from the new universal health care coverage mandate but still can't afford it. And on this point, Massachusetts has hit one big brick wall--and they don't have the means to go further.

That isn't trash talking. It is the reality we all need to face when trying to understand what the Massachusetts health care reform law means to the rest of us.

You can get the full exemption scale at the Connector Website.

See my earlier posts on the Massachusetts Universal Health Plan

Thursday, April 12, 2007

The Medicare Part D Drug Benefit: "The Ugliest Night I Have Ever Seen" - "60 Minutes" Report on How the Medicare Drug Benefit Became Law

As any any of you who know me, or who have regularly read this blog, know, I have great disdain for the Part D Medicare drug benefit--the way it was passed and the horrible health care policy it represents.

I do believe seniors are entitled to coverage for their drugs. But instead of layering $8 trillion of unfunded liability (the whole of Social Security has a $4 trillion unfunded liability) on an already unsustainable Medicare system, a new drug benefit should have been part of a modernized Medicare program.

Ironically, I thought George Bush outlined the beginnings of a pretty good Medicare modernization plan when he first ran for president. Instead, we got this irresponsible Part D mess that we are going to have to clean-up down the road. We also got an unsustainable Medicare Advantage plan instead of real Medicare reform and a sustainable place for the private market in it.

Now, with a Democratic Congress, all Bush and the Republicans ended up doing was to give their opposition party an excuse to dismantle bad policy. Not what I would call sustainable reform.

The CBS news show "60 Minutes" recently did a piece titled, "Under the Influence." It detailed the way the Medicare Part D plan--and the Medicare Advantage program--was passed. Not surprisingly, part of the report is at least friendly to the idea that government should be able to negotiate drug prices in the U.S--bad policy gives your opponents all the ammunition they need for their own agenda.

From the "60 Minutes" transcript:

If you have ever wondered why the cost of prescription drugs in the United States are the highest in the world or why it's illegal to import cheaper drugs from Canada or Mexico, you need look no further than the pharmaceutical lobby and its influence in Washington, D.C.

According to a new report by the Center for Public Integrity, congressmen are outnumbered two to one by lobbyists for an industry that spends roughly a $100 million a year in campaign contributions and lobbying expenses to protect its profits.

One reason those profits have exceeded Wall Street expectations is the Medicare prescription drug bill. It was passed three-and-a-half years ago, but as 60 Minutes correspondent Steve Kroft reports, its effects are still reverberating through the halls of Congress, providing a window into how the lobby works.

The unorthodox roll call on one of the most expensive bills ever placed before the House of Representatives began in the middle of the night, long after most people in Washington had switched off C-SPAN and gone to sleep.

The only witnesses were congressional staffers, hundreds of lobbyists, and U.S. Representatives like Dan Burton, R-Ind., and Walter Jones, R-N.C.

"The pharmaceutical lobbyists wrote the bill," says Jones. "The bill was over 1,000 pages. And it got to the members of the House that morning, and we voted for it at about 3 a.m. in the morning."

Why did the vote finally take place at 3 a.m.?

"Well, I think a lot of the shenanigans that were going on that night, they didn't want on national television in primetime," according to Burton.

"I've been in politics for 22 years," says Jones, "and it was the ugliest night I have ever seen in 22 years."

The legislation was the cornerstone of Republican's domestic agenda and would extend limited prescription drugs coverage under Medicare to 41 million Americans, including 13 million who had never been covered before.

At an estimated cost of just under $400 billion over 10 years, it was the largest entitlement program in more than 40 years, and the debate broke down along party lines.

But when it came time cast ballots, the Republican leadership discovered that a number of key Republican congressmen had defected and joined the Democrats, arguing that the bill was too expensive and a sellout to the drug companies. Burton and Jones were among them.

"They're suppose to have 15 minutes to leave the voting machines open and it was open for almost three hours," Burton explains. "The votes were there to defeat the bill for two hours and 45 minutes and we had leaders going around and gathering around individuals, trying to twist their arms to get them to change their votes."

Jones says the arm-twisting was horrible.

"We had a good friend from Michigan, Nick Smith, and they threatened to work against his son who wanted to run for his seat when he retired," he recalls. "I saw a woman, a member of the House, a lady, crying when they came around her, trying to get her to change her votes. It was —it was ugly."

When the prescription drug bill finally passed shortly before dawn, in the longest roll call in the history of the House of Representatives, much of the credit went to former Congressman Billy Tauzin, R-La., who steered it through the house.

"It's just a messy process," Tauzin says. "I mean, the old adage about if you like sausage or laws, you should not watch either one of them being made is true. It's a messy process."

Tauzin says that the voting machines were open for three hours "because the vote wasn't finished."

As for arms being twisted? "People were being talked to," he says.

And of Walter Jones' comment that it was the "ugliest night" he had "ever seen in politics in 22 years?"

"Well, he's a young member," counters Tauzin with a laugh. "Had he been around for 25 years, he'd have seen some uglier nights."

The whole transcript from "60 Minutes."

My earlier post: Part D Was “Financially Irresponsible”—The Medicare Part D Drug Plan Liability is Twice That of the Social Security System!

A Bipartisan Bill to Ban Genetic Discrimination Continues to Move Through the Congress

The House continues to move toward approving a genetic discrimination bill that would prohibit health plans from collecting genetic information and from requesting, requiring, or purchasing such information for insurance underwriting purposes.

Employers would be prohibited from using genetic information in the hiring process.

The bill is now working its way through the committee process with bipartisan House approval likely in the next few weeks. President Bush is expected to sign the bill once it makes its way through the Senate.

Opponents worry that the bill is so broadly worded that it will create a new potential for class action lawsuits.

However, the momentum is so strong—House Ways and Means approved it unanimously—that the way toward passage seems clear.

Wednesday, April 11, 2007

A Drug Reimportation Bill Continues to Receive Bipartisan Congressional Support

A drug reimportation bill that would enable consumers, drug retailers, and wholesalers to import cheaper foreign drugs from FDA-approved plants and warehouses continues to gain support. The CBO reported that the bill would generate $50 billion in savings for pharmaceutical purchasers over 10 years.

While a floor vote has not yet been scheduled in either house, we continue to believe this, or a similar drug reimportation bill, will pass both houses in this Congress.

The real question is can its supporters sustain a Bush veto? That one is too close to call.

Tuesday, April 10, 2007

A Mental Health Parity Bill Still on Track for Passage

During the last few weeks we reported that it is likely a bipartisan mental health parity bill will emerge from this Congress after years of inaction on the issue.

That prediction still holds today.

In past years, the Republican Congressional leadership blocked the bill even though the votes were there for passage--with many Republicans behind it. With the Democrats now controlling the Congressional agenda, there is no longer any obstacle to passage.

A compromise bill in the Senate, sponsored by Ted Kennedy (D-MA) and supported by the insurance industry and large employer health plan sponsors, will eventually trump a House version sponsored by his son, Patrick Kennedy (D-RI). The Senate mental health parity bill differs from the House version because it does not specify which mental health conditions will be covered (that is left to plan sponsors) and it would override tougher state mandates creating a single national standard.

Dad is confident he and his son “will find ways of working together.” Not hard to predict who’s going to win this one.

Thursday, April 5, 2007

The Health Wonk Review--A New and Improved U.S. Health Care System

Jane Hiebert-White host's this edition of Health Wonk Review over at the Health Affairs Blog. Health Wonk Review is a bi-weekly round-up of the best in health care policy blogging.

This edition is loaded with commentary on how we might achieve universal coverage--or not.

Tuesday, April 3, 2007

The Real Reason Health Care Reform is Hard—Hillary Clinton Leads the Presidential Candidates With $26 Million in First Quarter Campaign Contributions

Reading the press, it’s as though raising money for a presidential run is a sweepstakes to be won—like it’s something to be proud of.

Just exactly what should we all be celebrating?

Hillary Clinton leads the way with $26 million raised in the first three months of the year before the presidential election. Senator Obama is reportedly going to come in well over the $20 million figure and John Edwards has broken the old record with a now paltry looking $14 million in the first quarter.

On the Republican side, Mitt Romney is surprising everyone inside the Beltway with $23 million while Rudy Guliani as at $15 million and John McCain has collected $13 million.

To raise $26 million in 90-days, Senator Clinton had to raise $288,000 a day or $12,000 an hour!

When I began coming to Washington in the late 1980s, the constituency you represented probably counted the most, followed by how good your ideas were, and then followed by whether or not your company’s political action committee (PAC) gave the senator or representative maybe $1,000.

I am convinced that, in the wake of the 2008 presidential election, this country is going to have a major league debate about where our health care system will go.

I’d feel a lot better about that debate if constituency and ideas were more important than where the winning candidate raised $12,000 an hour.

Oh for the good old days when $1,000 bought you some quality access.

The system wasn’t anywhere near as corrupt—and, to the degree it was, it cost us a lot less to boot.


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